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A vice-chancellor who sat on the Browne Review panel has criticised universities for their "self-defeating naivety" in rejecting an idea at the heart of the proposals that would have made higher education in England more sustainable.

David Eastwood said he did not understand why the sector had instead "rushed to embrace" the system of two tuition-fee caps, which he said would "almost certainly" result in an average fee higher than that envisaged by the original Browne proposals.

Speaking at a seminar hosted by the Higher Education Policy Institute at the Houses of Parliament on 15 February, Professor Eastwood said he accepted that the "soft cap" proposed by Lord Browne had been too complex for many to understand at first glance.

But he added that he was surprised that the plan - which would have imposed a rising levy on universities charging above £6,000 to help insure against the public cost of high fee loans - was dismissed by many as "objectionable".

"Almost certainly the median fee under the Browne proposal would have been lower than those that will emerge under the twin-cap system," he said.

He added: "I understand the political logic that drove the coalition to twin caps; I understand rather less well why the sector rushed to embrace it."

Professor Eastwood, vice-chancellor of the University of Birmingham and a former chief executive of the Higher Education Funding Council for England, also lamented the dismissal of Browne's proposal to free student numbers.

He warned that the result would be institutions squeezed like a "toothpaste tube", with fees pushed towards the upper cap.

Professor Eastwood also said that short-term political fixes had undermined the Browne vision, and hinted that there were signs that the forthcoming higher education White Paper might fail to offer the firm solutions needed because it would be more like a consultative Green Paper.

"I worry now that too much will be about what we can get through and too little about what we ought to do," he said.

The seminar also heard from Nicholas Barr, professor of public economics at the London School of Economics, who said the government had been "simply wrong" to save money by scrapping widening-participation schemes such as Aimhigher while "pretending" that it was improving access for disadvantaged students.

He called for such projects to be restored, and said that the decision to scrap the teaching grant for disciplines such as the arts and humanities ought to be reversed.

Professor Barr suggested that there should be a block grant for universities that was not based on student numbers - to eliminate the cost to the government of expansion while the taxpayer subsidy of government loans should also be removed.

This could be done, he said, by making loans "leak" less taxpayer funding and by charging graduates and universities an extra "risk premium" to cover the large amount of debt that will be written off.